2nd UPDATE: BEFORE THE BELL: Yahoo Rises On Microsoft Offer

Feb.01, 2008 in Market Outlook

Last Update: 2/1/2008 9:23:57 AM

(Updates with Chevron, Manpower starting in 11th paragraph, stock prices
throughout.)

NEW YORK (Dow Jones)–Shares of Yahoo! Inc. (YHOO) rose 50% to $28.80 before the
opening bell Friday after Microsoft Corp. (MSFT) offered to buy the Internet
company for $44.6 billion, a move designed to pick up a struggling rival as both
fight against archrival Google Inc. (GOOG).

The offer, $31 a share in cash and stock, is a 62% premium to Thursday’s closing
price of $19.18. Microsoft closed at $32.60 and dipped 5.4% to $30.83 in pre-open
electronic trading.

Microsoft said the market for online advertising is “increasingly dominated by
one player. Together, Microsoft and Yahoo! can offer competitive choice while
better fulfilling the needs of customers and partners.”

Shares of Google fell 6.6% to $527 on news of the deal, and after posting revenue
and profit short of Wall Street expectations late Thursday.

MBIA, Ambak Up; Report Says 8 Banks Forming Bailout Group

Shares MBIA Inc. (MBI) shot 9.7% higher to $17, and Ambac Financial Group Inc.
(ABK) shares shot up 15% to $13.40 following a CNBC report saying eight banks
have formed a consortium in an effort to rescue the beleaguered bond insurers.

The banks, including the Royal Bank of Scotland Group PLC (RBS), Societe Generale
(SCGLY), Wachovia Corp. (WB), BNP Paribus SA (BNPQY), Barclays PLC (BCS),
Dresdner Bank AG, UBS AG (UBS) and Citigroup Inc. (C); will work on a solution
with the bond insurers and the New York State Insurance Department, CNBC’s Steve
Liesman reported, citing an unnamed source.

The bond insurers added to gains made Thursday after MBIA said it is confident in
its ability to maintain its AAA rating and has the ability to raise more capital,
while dismissing any possibility the company faces insolvency or default.

Exxon Mobil Up After Posting Record Profit

Shares of Exxon Mobil Corp. (XOM) rose 1.2% to $87.40 after the world’s biggest
oil company by market value posted the highest quarterly results in corporate
history as record oil prices pushed the energy giant’s fourth-quarter earnings
and revenue into the stratosphere.

The Irving, Texas company’s net income rose 14% to $11.66 billion, or $2.13 a
share, as revenue grew to $116.64 billion from $90.03 billion. The previous
quarterly earnings record was the $10.71 billion Exxon recorded in the fourth
quarter of 2005. Year-earlier results included a $410 million tax benefit.

Analysts expected per-share earnings of $1.95.

Chevron Rises; 4Q Income Up On Record Crude Prices

Shares of Chevron Corp. (CVX) gained 2% to $84.95 after fourth-quarter net income
jumped 29%, thanks to strong gains from its exploration and production segment
due to record crude prices.

The nation’s second-largest oil company after Exxon Mobil Corp. (XOM) reported
net income of $2.32 a share compared to $1.74 a share a year earlier as revenue
climbed 29% to $61.41 billion.

Analysts’ estimates were for earnings of $2.26 on revenue of $76.09 billion.

Nymex Up On 4Q Profit Rises 50%

Shares of Nymex Holdings Inc. (NMX) rose 89 cents to $115 after the company said
fourth-quarter net income rose 50% as costs fell and volume increased, driven by
strong electronic-trading growth.

The parent of the New York Mercantile Exchange recorded net income of 67 cents a
share, up from 48 cents share a year earlier. Results included a $1.4 million
severance charge due to November job cuts. The company had expected to record
such charges of as much as $4 million.

Revenue grew 38% to $172.6 million.

The mean per-share earnings estimate of analysts polled by Thomson Financial was
66 cents on revenue of $172 million.

Cummins Falls; 4Q EPS Below Estimates

Shares of Cummins Inc. (CMI) fell 6.3% to $45.30 after the company said
fourth-quarter net income rose 4.8% despite a steep, expected falloff in the
North American heavy truck engine market, as the company benefited from growth at
its other units.

The Indiana engine maker reported net income of $1 a share compared with 94 cents
a share a year earlier as revenue rose 16% to $3.52 billion.

Analysts expected earnings of $1.05 a share on revenue of $3.46 billion.

Looking forward, the company said it expects sales to rise 12% in the coming year
as the North American truck engine market to rebound “somewhat,” despite “the
uncertainty that exists in the U.S. economy.” Analysts expect 12% growth in 2008
as well.

Manpower Up; Beats EPS Estimates

Shares of Manpower Inc. (MAN) rose 1.8% to $56.78 after the company reported
earnings that beat estimates.

The company said fourth-quarter net income fell 19% to $133.1 million, or $1.63 a
share, compared with $164.4 million, or $1.90 a share, a year earlier. The prior
year included 75 cents a share in earnings from discontinued operations.

In October, the company said it expected fourth-quarter earnings of $1.50 to
$1.54 a share, above analysts’ then estimates. Chairman and Chief Executive
Jeffrey A. Joerres said at the time the company detected “a bit of caution in the
markets” but didn’t expect any market weakness to “significantly affect”
fourth-quarter performance.

Revenue increased 20% to $5.63 billion. On a constant currency basis, revenue
rose 9%.

Analysts forecast mean fourth-quarter earnings of $1.53 a share on revenue of
$5.46 billion.

Stock Futures Give Up Most Gains Following Jobs Report

U.S. stock futures gave up most of their early morning gains Friday, as a
disappointingly weak January payroll report trumped optimism from Microsoft’s
unexpected, $44.6 billion offer for Yahoo.

Standard & Poor’s 500 futures were down one point at 1378.6, Dow Jones Industrial
Average futures rose 6 points to 12620 and Nasdaq futures rose 9.75 points to
1857.50.

-Jerry A. DiColo, Dow Jones Newswires; 201-938-2007; jerry.dicolo@dowjones.com

(END) Dow Jones Newswires

February 01, 2008 09:23 ET (14:23 GMT)

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